The JLK Corporation is considering an investment that will cost RM80,000 and have a useful life...

The JLK Corporation is considering an investment that will cost RM80,000 and
have a useful life of 4 years. During the first 2 years, the net incremental after-tax
cash flows are RM25,000 per year and for the last two years they are RM20,000
per year. Calculate the payback period for this investment.

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

A company is considering an investment that will cost $743,000 and have a useful life of...

A company is considering an investment that will cost $743,000 and have a useful life of 8 years. The cash flows from the project are expected to be $410,000 per year in the first two years then $142,000 per year for the last 6 years. If the appropriate discount rate is 12.7 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: a. $394283 b. $1880283 c. $384492 d. $516026

A company is considering an investment that will cost $744,000 and have a useful life of...

A company is considering an investment that will cost $744,000 and have a useful life of 8 years. The cash flows from the project are expected to be $512,000 per year in the first two years then $108,000 per year for the last 6 years. If the appropriate discount rate is 15.0 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: a. $397417 b. $1885417 c. $415178 d. $497087

Company XYZ is considering an investment of $100,000. The useful life of the project is 10...

Company XYZ is considering an investment of $100,000. The useful life of the project is 10 years. The cut off period is three (3) years. The board of the directors has identified two alternatives A and B. The expected annual cash flows are as follows: Cost of Cash Flow Alternative A Alternative B Initial Cost ($100,000) ($100,000) Cash Flow Year 1 35000 35000 Cash Flow Year 2 28000 35000 Cash Flow Year 3 32000 35000 Cash Flow Year 4 40000...

The cost to purchase “New Tech” will be $421,000 and will have a useful life of...

The cost to purchase “New Tech” will be $421,000 and will have a useful life of 6 years; “New Tech” will have a salvage value of $26,000 at the end of 6 years. The cost to purchase “Standard Classic” will be $235,000 and will also have a useful life of 6 years; “Standard Classic” will have a salvage value of $5,000 at the end of 6 years. Total Contribution Margin from the sale of Widgets will be different for each...

A firm is considering investing $42,000 in equipment that is expected to have a useful life...

A firm is considering investing $42,000 in equipment that is expected to have a useful life of four years and is expected to reduce (save) the firm’s labor costs by $8,900 per year. The equipment can be sold for $18,000 at the end of the period. Assume the firm pays a 40% income tax rate on its taxable income and uses the declining balance (200%) depreciation method. The firm’s after tax MARR is 5% per year. What are the after-tax...

A firm is considering the following investment project. Theproject has a 5-year useful life with...

A firm is considering the following investment project. The project has a 5-year useful life with a $125000 salvage value as shown. Straight-line depreciation will be used. Assume the income tax rate of 34%. What is the after-tax rate of return on this capital expenditure?

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $ 164,800 $ 180,250 $ 204,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 3 14,420 16,480 21,630 4 14,420 12,360 13,390 5 14,420 9,270 12,360 Total $ 72,100 $ 74,160 $ 98,880 Depreciation is computed by the straight-line method with no salvage...

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. I got all the answers by my computation for average rate of return Is wrong Project Bono Project Edge Project Clayton Capital investment $164,800 $180,250 $206,000 Annual net income: Year 1 14,420 18,540 27,810 2 14,420 17,510 23,690 3 14,420 16,480 21,630 4 14,420 12,360 13,390 5 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation...

Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of...

Henkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Kilo Project Lima Project Oscar Capital investment $165,850 $176,550 $200,850 Annual net income: Year 1 13,910 18,725 29,425 2 13,910 17,655 24,075 3 13,910 16,585 23,005 4 13,910 12,305 14,445 5 13,910 9,095 13,375 Total $69,550 $74,365 $104,325 Depreciation is computed by the straight-line method with no salvage value. The company’s cost...

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...

U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $161,600 $176,750 $204,000 Annual net income: Year 1 14,140 18,180 27,270 2 14,140 17,170 23,230 3 14,140 16,160 21,210 4 14,140 12,120 13,130 5 14,140 9,090 12,120 Total $70,700 $72,720 $96,960 Depreciation is computed by the straight-line method with no salvage value. The company’s cost of capital...

Subjects